So where's the growth supposed to come from?

Not much of a surprise. But in November it added up to a record 14th straight monthly drop in credit card debt.

Today, January 8, the Federal Reserve reported that credit-card debt fell by $13.7 billion in November. Total seasonally adjusted consumer debt fell $17.49 billion. That’s equal to an 8.5% annual rate of decline. The drop in total consumer debt was far larger than the $4 billion that economists had been expecting.

The consumer debt numbers lag behind such economic indicators as unemployment by about a month. But the December unemployment numbers, also released today, argue that the December consumer debt numbers will continue to show that consumers are cutting back (or that banks are cutting back for them by reducing credit lines.)

Nonfarm payrolls fell by 85,000 in December. Official unemployment held steady at 10%, average hourly earnings climbed by 0.2%, and average weekly hours worked held at 33.2. The "real" unemployment rate, which counts discouraged workers and those working fewer hours than they want, rose slightly to 17.3% from 17.2% in November.

Most of the job loss came in the goods-producing sectors of the economy where construction employment fell by 53,000 and manufacturing jobs dropped by 27,000. Jobs in the service sector fell by just 4,000.

The bad news in these two reports is obvious. The consumer sector of the economy, which makes up about two-thirds of all economic activity, isn’t showing signs that it will produce strong growth in 2010. And manufacturing activity, which had looked strong in recent surveys, suddenly seems suspect.

The good news, such as it is, is that with these numbers the Federal Reserve isn’t likely to raise interest rates any time soon.